July 12 (Bloomberg) -- Eastman Kodak Co. will meet with
lenders on July 15 at 1 p.m. in New York to discuss $695 million
of loans its seeking for distributions to creditors as part of a
reorganization plan, according to a person with knowledge of the
transaction.

The photography pioneer that filed for bankruptcy in
January 2012 is seeking a $420 million, six-year first-lien term
portion that will pay interest at 4.75 percentage points to 5
percentage points more than the London interbank offered rate,
said the person who asked not to be identified because terms are
private. The lending benchmark will have a 1 percent minimum.

“This financing will enable Kodak to repay secured
creditors and debtor-in-possession loans, finance its exit from
Chapter 11 and meet working capital and liquidity needs,”
Christopher Veronda, a spokesman for Kodak, said in a telephone
interview. “We expect the new financing proposal to provide
more favorable terms to our existing loan arrangement.”

The company is scheduled to return to court on Aug. 20 for
approval of its bankruptcy plan, financing for which is an
“essential component” for Kodak’s restructuring, the company
said in court papers in U.S. Bankruptcy Court in Manhattan.
JPMorgan Chase & Co., Bank of America Corp. and Barclays Plc are
arranging the financing, Rochester, New York-based Kodak said in
a June 20 statement.

The transaction includes a $275 million second-lien loan
that comes due in seven years, the person said. It may pay
interest at 8.25 percentage points to 8.5 percentage points more
than Libor with a 1.25 percent floor.

The first-lien piece will be offered to lenders at 99 cents
on the dollar, while the second-lien slice may be sold at 98.5
cents, the person said. Such discounts reduce proceeds for the
borrower and boost the yield for investors.

The financing agreements are subject to conditions,
including approval by the Bankruptcy Court, the company said in
the statement. It includes an asset-based revolving line of
credit that comes due in 2018 of as much as $200 million.

First-lien debt is repaid first in a bankruptcy or
liquidation; second-lien debt is repaid next.